Qatar's QIIB mulls sale of UK Islamic lender

Islamic Bank of Britain

Islamic Bank of Britain

Qatar International Islamic Bank (QIIB), parent company of Islamic Bank of Britain (IBB), is considering the sale of the UK's only sharia-compliant retail lender as it struggles to gain scale in the UK market.

IBB confirmed it had received an approach by QIIB, which currently owns a controlling 88.41 percent stake, to take over the remaining shares with a view to a possible sale as it considers the strategic future of the UK bank.

Masraf Al Rayan, the biggest Islamic bank in Qatar, said on Monday that it had begun negotiations to acquire a 70 percent stake in IBB, with the remaining 30 percent stake to be bought by the Qatar government.

"QIIB has also indicated that it has begun initial, non-binding discussions with certain potential third party purchasers, which include Masraf; there has been no approach by Masraf to IBB," IBB said in a statement.

Founded in 2004, IBB was the first standalone Islamic retail bank in the UK with a high street presence with five branches and around 50,000 customers, offering financial services that adhere to Islamic principles such as a ban on interest.

IBB's founding shareholder QIIB took full control of the bank in 2011, in a deal valued at the time at around £25m ($38.65m), as part of a plan to develop an international banking business compliant with sharia laws.

But the sharia lender has struggled to turn a profit since inception, reporting a full-year loss of £8.9m in 2011.

Speaking to Reuters in April, Sultan Choudhury, managing director at Islamic Bank of Britain, said he was confident the bank could gain traction and become profitable within the next three years.

QIIB has until July 5 to make an offer under UK financial regulations. IBB said it will make a further announcement on the matter in due course. No details of the size of the possible deal were disclosed.

The UK is the largest Islamic finance centre in Europe, accounting for $19bn of $1.7trn in global assets and is home to five fully sharia-compliant banks, data from the UK Islamic Finance Secretariat (UKIFS) estimates.

The close ties between the oil-rich Gulf and the UK has led to a flurry of activity aimed at capitalising on the two-way traffic.

Britain's largest standalone sharia bank, Bank of London and the Middle East (BLME), is awaiting regulatory approval to start operations in the Gulf this year, while Abu Dhabi Islamic Bank , the second-largest Islamic lender in the UAE, opened its first branch in London in May.


Market Performance

Qatar International Islamic Bank
0.0 0.0 (%)
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Saudi riyal peg pressure eases, but not gone

Saudi riyal peg pressure eases, but not gone

Volatile energy swings mean the currency remains vulnerable,...

The Gulf's sovereign dilemma

The Gulf's sovereign dilemma

With oil prices still faltering around their lowest level in...

Gulf's bond market thaws as panic over oil fades

Gulf's bond market thaws as panic over oil fades

Improved sentiment seen in the response to a $500m, five-year...

Most Discussed